Google Declared a Monopoly by the United States Government

There’s no question that Google is the 800-pound gorilla in the tech industry that we all have to work around. Many have cried “monopoly”, but Google’s actions have always appeared just pro-competitive enough to escape legal action – that is, until now. Google LLC has now been officially labeled as a monopoly by the United States government; let’s dive into the details and what advertisers need to know.

Details on the Four-Year Lawsuit

In October 2020, the United States Department of Justice – along with several States – filed several suits against Google for Antitrust behaviors. Allegations included monopolistic actions in three separate markets – general search services, search advertising, and general search text advertising. After years of research and analysis, the trial began in September 2023.

On August 5th, 2024, the District Court of Washington D.C. released a 284-page ruling in favor of the DOJ and States on two counts; Google acted in an anticompetitive and exclusionary manner in general search services and general search text advertising.

General Search Services

Google is the most popular search engine in the world, and it’s not even close. In 2020, Google accounted for 90% of all search queries; second place goes to Bing, which had 6% of all searches. Google has an even more powerful lead on mobile devices, where it handles 95% of search queries.

Google commands so much of the search engine market that competitors are automatically at a serious disadvantage. Bing has reported that potential partners refuse to share first-party data with the search engine because of their relatively tiny scale compared to Google. One travel agency even requested that Bing finance the company’s advertisements, since generated revenue likely wouldn’t be sufficient to maintain them.

Such overwhelming power is bad enough, but Google has gone to great lengths to discourage what little competition remains. The tech giant has leveraged its massive wealth to secure distribution deals with major device manufacturers, making Google the default search tool on nearly every online-capable device. The deals it strikes are so prohibitively expensive that other search tools stand no chance of ever entering a similar agreement.

General Search Text Advertising

With such a command of the search engine market, advertisers naturally flock to Google for a chance to get sponsored links on the search results page. The placement and order of these text-based ads is generally determined by ad relevance, quality, and bid amount, but Google has been using some sneaky means to scoop some off the top.

Through manipulation of its second-price auction system, Google has been shown to artificially inflate the winning bid price, earning them a few extra cents on each auction. When billions of searches happen each day, those extra cents add up quickly.

In addition, Google substantially increased the required fee to add formatting options to the text; format pricing made up an entire 20% of Google’s revenue from all text ads in 2019. To cap it all off, incriminating emails have suggested that Google will randomly disable advertiser bids if they do not bid above some unknown threshold.

These are just a few examples; there are other tricks Google has pulled that can’t be explained without getting into complex details. The important point is this: the court found Google had earned monopoly profits by generally charging supracompetitive pricing which could not be sustained in a competitive market. Thus, Google is officially a monopolistic entity.

What Happens Now?

Shortly after the ruling was released, Google of course appealed the decision. While the ruling labeled Google a monopoly, the details on what they must do to fix it were beyond the scope of this suit. Another trial – as yet unannounced – is likely to take place which will specify what the corporation will be required to do to satisfy the court.

What could the remedies be? An extremely unlikely solution is a full breakup: dividing Google into separate entities. Such a change would be long, complicated, and messy, so we’re more likely to see restrictions on certain kinds of business contracts – like those between Google and device manufacturers.

Another lawsuit targeted at Google is on the way, due to begin in September. The DOJ is once again suing Google, but this time over its grip on advertising technology. While Google only controls approximately 25% of the digital advertising market, this recent ruling sets a legal precedent: Google has already been called out for monopolistic practices, which will make it easier for the DOJ and States to argue their case against the tech giant.

What Does it Mean for Advertisers?

This case serves as a cautionary tale for digital advertisers who hold a “top-bid or bust” mentality. Only so many messages can occupy the highest placements, and the relentless chase to be top dog only drains budgets and (apparently) builds monopolies. It all means that advertisers need to be smart about building their programmatic ad campaigns and not reliant upon a single network or DSP.

For example, many advertisers have grown heavily reliant upon Google Performance Max and Google Demand Gen campaigns in 2024, ditching other DSPs and programmatic efforts. Not only are they limiting cost efficiency by locking themselves out of various marketplaces, they are limiting their reach and flexibility to reach their audience through different networks. Now that Google is in hot water, these advertisers are also in danger of huge negative impacts from Google’s inevitable changes, which could leave them down and scrambling.

Not an Expert? We’ve got a Whole Team

Whether you’re a pro at targeting campaigns or aren’t even sure what programmatic advertising is, Genius Monkey is the platform of choice for those who want to increase conversions and decrease wasted ad spend. Our industry-leading Meta-DSP platform – combined with expert human supervision – will ensure your messages get in front of your audience at the lowest price possible.

Ready to see how programmatic can evolve your marketing strategy? Get in touch with the Genius Monkeys today!